You may call it the sign of the changing times. At least four large foreign private equity firms are chasing independent outdoor advertising firm Laqshya, and if sources are to be believed, Warburg Pincus has already firmed up plans to pick up 15-20% equity stake for Rs 300 crore in the Mumbai-based outfit.
According to Laqshya promoter Alok Jalan said, “The information about the Warburg investment in our company is not correct. At the moment, we are talking to several PE funds for growth funding but nothing has been finalised.”
A source told ET that Morgan Stanley, Goldman Sachs, Credit Suisse First Boston and KBC are also in fray but the deal is likely to go in favour of Warburg Pincus.
Outdoor media firms have recently been on the radar of PE and venture capital funds. New airports, roads, highways, malls and emergence of organised retail have created the need for outdoor advertising like billboards, hoardings, mobile vans, bus shelters, promotional activities at the point of purchase and television screens.
This has made outdoor media companies very attractive for foreign and Indian funds. At least, half a dozen small and mid-size deals have been sealed in this space that includes Goldman Sachs and Lehman picking up 16.5% stake in Times Innovative Media and 3i backing Mumbai-based OOH Media.
Laqshya is one of the country’s largest integrated out-of-home (OOH) media companies with 30 offices across 20 cities. UTI Venture is the other investor in the company, which had put in $10 million in 2006. Last year, Laqshya raised $35 million from Saudi-based PE Fund Amwal Al Khaleez for its Dubai subsidiary Right Angle Media.
Laqshya recently launched an air-conditioned bus shelter project in Dubai through Right Angle Media. Back home, it is associated with the new Hyderabad airport where it has created signages. Other Laqshya clients include UTI Mutual Fund, Kingfisher Airlines, HDFC Bank, LIC, Air India, Shoppers’ Stop and Diageo India.
Laqshya is a founder member of IOAA (Indian Outdoor Advertising Association). Apart from India, it has a presence in Dubai, Abu Dhabi and Sri Lanka, which makes it the only multinational in OOH media space.
The outdoor advertising (out-of-home) industry is estimated at around Rs 1,500-2,000 crore, though a large part of it remains unorganised and localised. The industry’s growth is estimated at around 20% and may account for 10-12% of the country’s total ad spend by 2010.
Growth is being fuelled by the emergence of digitisation of hoardings and billboards, the proliferation of modern trade and advertisers increasingly looking at diverting spends from the conventional print and television media to relatively less expensive and localised means of communication, a source said.
Source: Economic Times